JLBC - Monthly Fiscal Highlights

May 2017

Summary
1716 W. Adams
Phoenix, AZ 85007
Phone:
(602) 926-5491
Fax:
(602) 926-5416

April 2017 General Fund revenues totaled
$1.03 billion and were (9.7)% below the prior
year. Collections for the month were $(78.5)
million below the enacted budget
forecast.
Year-to-date, excluding Urban Revenue
Sharing and one-time fund transfers, General
Fund revenues are 1.0% above the prior year
and are $(86.1) million below forecast.

www.azleg.gov/jlbc.htm

"Year-to-date,
…General
Fund revenues
are 1.0%
above the
prior year and
are $(86.1)
million below
forecast.”

The significant decline in April revenues and
the corresponding forecast loss were
concentrated in the Individual Income Tax
(IIT) category. The poor IIT performance was
spread across the category's
subcomponents:
• Withholding was $(13.6) million below
forecast – April withholding growth
remained relatively flat, compared to yearto-date growth of almost 6%
• Payments declined by (4.1)%, and were
$(42.1) million below forecast. April 2017
payment growth was the lowest since April
2014.
• The dollar value of refunds increased
significantly over the prior year, causing a
forecast loss of $(46.0) million.
The April data is difficult to interpret as more
income tax returns are to be processed, but
there are at least 2 possible causes for the
monthly results.

First, the timing of income tax return
processing may have artificially reduced April
collections. Based on the first half of May
activity, payments are higher than expected
and refunds are lower than expected. As a
result, we may possibly recapture half of
April's revenue loss with higher May
collections.
A second reason for the April IIT shortfall may
involve taxpayers deferring their income to
Tax Year 2017, in anticipation of potential
income tax reductions. For example,
taxpayers may be deferring the realization of
capital gains from Tax Year 2016 (which
would have been paid in April 2017) to Tax
Year 2017 (which will be paid in April 2018).
Deferral of gains may help explain the (3.3)%
reduction in average IIT payments since
January. In addition, high investment income
states (such as California and Connecticut)
also experienced declines in April tax
payments.
The uncertainty surrounding the April
collections could begin to clear as early as
next month when the primary tax filing season
draws to a close, but we may not have
sufficient evidence regarding the time shift of
capital gains until this time next year.
April Spending
In comparison to April revenue collections of
$1.03 billion, April 2017 spending was $634.2
million, which is an increase of $62.4 million
from the prior year.

Table of Contents

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
May 22, 2017.

Summary

Summary of Recent Agency Reports

• April Spending ..................................................... 1

• DCS – Monthly Hiring Report ............................. 8

• FY 2017 Ending Balance .................................... 2

• Commerce – Healthy Forest Program ............ 8

April Revenues ........................................................ 2

• ADE – Budget Status Report .............................. 9

Monthly Indicators.................................................. 5

• DPS – Border Strike Task Force Helicopter ....... 9

JCCR Meeting ......................................................... 8

April Spending ......................................................... 9
Arizona Economic Trends...................Appendix A

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Summary (Continued)
FY 2017 Ending Balance
The recently enacted budget projected an FY 2017
ending balance of $171 million. As a result, that
balance provides sufficient room to cover the year-todate revenue shortfall of $(86) million. Based on monthto-date data, May collections appear as though they
will materially shrink the year-to-date shortfall.

April Revenues
Table 1

April
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2017
Collections
$ 1,027.2
$ 7,473.8

Sales Tax collections of $400.3 million were 5.4% above
April of last year and $6.0 million above the forecast for
the month. April tax collections reflect sales activities that
occurred in March. Year-to-date, collections are up by
3.4% and are $2.6 million above forecast.
Individual Income Tax net revenues of $544.0 million in
April were $(85.8) million less than in the prior year and
$(101.7) million below forecast. Year-to-date, revenue
has grown 3.8% over the prior year and is $(31.4) million
below forecast.
As indicated in Table 2, April withholding increased by
0.5% from last year and was $(13.6) million below the
forecast. The low monthly growth was partly driven by
differences in the number of processing days in April
2017 compared to April 2016.
Year-to-date withholding collections are 6.4% above FY
2016. Due to technical reasons, DOR underreported
withholding receipts during July – April in FY 2016. If
revenues had not been underreported in the beginning
of FY 2016, growth in withholding would instead equal
5.1% year-to-date in FY 2017.
April estimated and final payments of $593.7 million were
(4.1)% below last year. Year to date, payments have
decreased (2.2)% compared to FY 2016 and are $(40.3)
million below the forecast.

Difference From
Enacted Forecast
$ (78.5)
$
(86.1)

Difference
From FY 2016
$ (110.6)
$
(151.1)

April Individual Income Tax refunds totaled $(369.3)
million – this compares to $(307.1) million in April 2016
and a forecasted amount of $(323.2) million. Year-todate refunds have led to a $(6.3) million revenue
decrease compared to the enacted forecast.
Table 2

Individual Income Tax Growth Rates
Compared to Prior Year
April
YTD
Withholding
0.5%
6.4%
Estimated/Final Payments
(4.1)%
(2.2)%
Refunds
20.2%
4.6%
Corporate Income Tax net collections were $74.8 million
in April, which was $0.4 million more than in the prior
year and $18.3 million above the forecast. Year to date,
collections are $(168.4) million below prior year
collections and $(51.0) million below forecast.
April collections had been expected to decline due to
the multi-year statutory decline in the Corporate
Income Tax rate. In terms of the major Corporate
collections months, the state last recorded a year over
year increase in January 2016.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

April Revenues (Continued)
Insurance Premium Tax collections of $30.2 million in April
were $(12.6) million below the prior year. Year-to-date,
collections are 1.4% above last year and $(18.3) million
below the forecast.
Through the end of April, year-to-date tobacco tax
revenues are (7.1)% below FY 2016 and are $(1.3) million
below forecast. Year-to-date liquor tax collections are
2.6% above 2017 and are $0.4 million above forecast.
The Lottery Commission reports that April ticket sales
were $77.2 million, which is $6.3 million, or 8.8%, above
sales in April 2016. Year-to-date ticket sales are $697.3
million, which is (4.9)% below last year’s sales. The yearto-date decrease reflects the one-time nature of
January 2016 ticket sales associated with a recordbreaking $1.4 billion Powerball jackpot. In terms of
General Fund collections, year-to-date lottery revenues
through April are $3.2 million above the forecast.
Highway User Revenue Fund (HURF) collections of $128.4
million in April were up 5.3% compared to April of last
year and were $0.5 million above forecast. Year-to-date
collections are 3.3% above last year.
Due to delays in reporting final March revenues for
various revenues sources, DOR has made technical
adjustments to prior month collection figures. For April,
DOR has decreased the amount of prior General Fund
revenue collections by $(0.9) million, and the adjustment
has been included in the reported year-to-date results.

4
Table 3

General Fund Revenue:

Change from Previous Year and Budget Forecast
April 2017
Current Month

FY 2017 YTD (Ten Months)

Change From
Actual

April 2016

April 2017

Amount

Change from
Budget Forecast

Percent

Amount

Actual

Percent

April 2016

April 2017

Amount

$3,711,226,062

$121,677,998

3,433,489,186

124,533,501

Budget Forecast
Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate
Property
Luxury - Tobacco
- Liquor
Insurance Premium
Other Taxes
Sub-Total Taxes

$400,318,128

$20,562,059

543,980,973

(85,757,443)

74,755,350

377,076

5.4 %
(13.6)
0.5

$5,973,415
(101,724,489)

1.5 %
(15.8)

3.4 %
3.8

$2,620,999
(31,415,363)

0.1 %
(0.9)

18,279,887

32.4

268,640,837

(168,389,046)

(38.5)

(51,049,330)

(16.0)

3,215,932

(1,902,045)

(37.2)

(1,607,950)

(33.3)

24,656,770

(5,286,866)

(17.7)

(3,067,293)

(11.1)

2,191,029

(51,642)

(2.3)

(330,537)

(13.1)

18,791,255

(1,435,720)

(7.1)

(1,295,254)

(6.4)

3,346,382

50,761

1.5

207,427

6.6

28,770,562

717,527

2.6

5,074,624

1.4

30,249,609

(12,615,726)

(29.4)

(12,844,394)

(29.8)

367,528,334

73,947

(2,558,865)

(97.2)

(1,979,349)

(96.4)

2,664,083

$1,058,131,350

($81,895,825)

(7.2) %

($94,025,989)

(8.2) %

$7,855,767,089

(4,115,942)
$72,776,076

(60.7)
0.9 %

430,688

1.5

(18,259,513)

(4.7)

(4,002,774)

(60.0)

($106,037,841)

(1.3) %

Other Revenue
Lottery
License, Fees and Permits
Interest
Sales and Services
Other Miscellaneous
Disproportionate Share
Transfers and Reimbursements
Sub-Total Other Revenue
TOTAL BASE REVENUE

0
3,266,756

(37,428,300) (100.0)
773,303

31.0

0
1,363,141

(20,236,407)

(31.1)

3,236,977

7.8

7,227,377

29.1

5,358,416

20.1

3,439

1,446

72.6

92,840

72,634

359.5

(92,615)

903,221

74.9

461,781

28.0

26,037,483

1,999,317

8.3

(1,146,114)

(4.2)

10,752,976

7,965,562

285.8

9,276,805

628.4

37,593,394

13,155,281

53.8

11,769,012

45.6

0

0
3,906,855

-89.3

$24,416,675

($23,877,913)

(49.4) %

$1,082,548,025

($105,773,738)

(8.9) %

0
4,390,294
$15,491,187
($78,534,802)

(19.5)

44,736,343
32,078,792

2,109,708

8,283,796

(834)

-71.6

--

0

0

29,322,524

636,229

173.6 %

$169,861,376

$2,854,430

1.7 %

$19,973,913

13.3 %

(6.8) %

$8,025,628,465

$75,630,506

1.0 %

($86,063,928)

(1.1) %

112.8

-2.2

0

(49.9)

848,237

-3.0

Other Adjustments
Urban Revenue Sharing
One-Time Transfers
Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(55,298,514)
0
(55,298,514)
$1,027,249,511

(4,828,986)
0

9.6

0

0.0

--

0

--

(4,828,986)

9.6 %

0

0.0 %

($110,602,725)

(9.7) %

($78,534,802)

(552,985,140)
1,191,548
(551,793,592)

(7.1) %

$7,473,834,874

0.4 %

$1,168,440,733

(48,289,863)
(178,405,707)

9.6
(99.3)

0

(0.0)

0

0.0

(226,695,570)

69.7 %

0

(0.0) %

($151,065,063)

(2.0) %

($86,063,928)

(1.1) %

3.3 %

($10,863,173)

(0.9) %

Non-General Funds
Highway User Revenue Fund

$128,379,670

$6,489,043

5.3 %

$471,142

$37,603,847

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Monthly Indicators
NATIONAL
According to the U.S. Department of Commerce Bureau
of Economic Analysis, the U.S. Real Gross Domestic
Product (GDP) increased at an annual rate of 0.7% in the
first quarter of 2017. This estimate reflects a slowdown
from the growth of 2.1% experienced in the prior quarter.
The slowdown relative to the prior quarter was primarily
due to a deceleration in consumption expenditures and
decrease in inventory investment. Declining
performance in these categories was partly offset by
growth in exports and residential and business
investment. Economists expect a portion of the
slowdown in GDP growth reflects temporary seasonal
variations not fully removed from the estimates.
The Conference Board’s U.S. Consumer Confidence
Index decreased by (3.7)% in April. The index fell to
120.3 during the month, which was still 27.0% above the
reading in April 2016 and was the second highest level
since December 2000. The monthly decrease reflected
a widespread tempering of confidence in current and
future economic conditions, following rapid prior month
gains. Economists expect a portion of the monthly
decrease was driven by a poor national jobs report and
stock market volatility.
According to the U.S. Department of Commerce Bureau
of Economic Analysis, the U.S. Personal Consumption
Expenditure Price Index (PCEPI) decreased (0.2)% in
March. The overall monthly decrease was driven by a
(3.4)% drop in energy prices and a (0.1)% drop in core
inflation (all items but food and energy). The index's
year-over-year growth decreased from 2.1% in the prior
month to 1.8% and now sits below the Federal Reserve
Bank's (Fed) 2.0% annual inflation target.
Consumer prices, as measured by the U.S. Consumer
Price Index (CPI), increased 0.2% in April and 2.2% above
April 2016 prices. Indexes for food, shelter, energy and
tobacco were primary contributors to the monthly
increase. After declining in the past 2 months, the
gasoline index saw a 1.2% increase, as did other major
energy indexes to varying degrees. Core inflation (all
items less food and energy) increased 0.1% for the
month. A number of indexes decreased, including
medical care, motor vehicle insurance, apparel and
recreation.
The Conference Board's U.S. Leading Economic Index
increased 0.4% in March to 126.7 and stands 3.5% above
its March 2016 reading. Of the index's 10 components, 8
made positive contributions for the month. Similar to
February, the Institute of Supply Management (ISM)
index for new orders and interest-rate spread were
strong contributors. Average weekly initial claims,

however, reversed course and made a negative
contribution, as did the average workweek for
production workers. Stock prices, building permits, and
consumer expectations made positive contributions.
ARIZONA
Housing
Single-family housing construction is increasing.
Arizona’s 12-month total of single-family building
permits is 24,791, or 4.1% more than a year ago. The
comparable single-family permit growth rate for the
entire U.S. is 8.8%.
The 12-month total of multi-family building permits has
started to increase again. Arizona’s total of 11,499
multi-family building permits is 26.8% more than 2016.
Nationwide multi-family permits are (10.4)% lower than
2016.
Tourism
Revenue per available room was $126.72 in March,
which was 8.1% above the amount in March 2016.
Strong growth in the measure may have been
bolstered by spring training attendance during the
month, which was 3.0% above attendance in March
2016.
Employment
According to the latest employment report released by
the Office of Economic Opportunity (OEO), the state
added 10,100 net new nonfarm jobs in April compared
to the prior month. This was more than the 10-year
average net job gain for April of 2,800 jobs. Most of the
month-over-month job gains occurred in the
Government sector (+2,600), followed by the
Construction industry (+2,300)
Compared to the same month in the prior year,
Arizona added 51,900 net new jobs in April, which is a
year-over-year increase of 1.9%. This was the smallest
such gain since September 2014. The largest yearover-year job gains in April came from the following
industries: Leisure and Hospitality Services (+17,200),
Education and Health Services (+11,100), and Financial
Activities (+9,800).
The state’s regular unemployment rate remained
unchanged at 5.0% in April. The U.S. unemployment rate
declined from 4.5% in March to 4.4% in April.
In March, the Average Weekly Hours worked by
individuals in Arizona’s private sector was 34.4 hours.
This workload was 0.6% above the level during the prior
month. The monthly increase raised the year-over-year
growth rate from (0.3)% in February to 0.3% in March.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Monthly Indicators (Continued)
The Average Hourly Earnings received by private sector
workers was $24.69, which is (1.4)% below the average
in the prior month. March earnings were 4.1% above
the average in March 2016. Year-over-year growth has
now been at or above 3.0% in each month since
February 2016.
The U.S. Bureau of Labor Statistics releases estimates
quarterly for a broader measure of labor underutilization
called the total unemployment rate. Besides the
“regularly” unemployed, the measure also includes
persons who are available to work but stopped looking
for a job (“discouraged workers”), and persons who had
to settle for part-time employment (“underemployed
workers”).
The Arizona rate averaged 10.9% from the first quarter of
2016 through the first quarter of 2017. This rate is 0.1%
above the reading issued for the prior period and
represents the measure's first increase in 3 years. The
state’s 10.8% rate was the fifth highest of any state,
which represented a weakening from the state's eighth
place rank during the prior period. The national
average for the measure was 9.5% during the quarter.
The Office of Economic Opportunity (OEO) reported
that 17,840 initial claims for unemployment insurance
were filed in March, an increase of 0.7% compared to
the same month last year.
According to OEO, the state had a total of 23,718
claimants receiving unemployment insurance benefits
in March, an increase of 1.6% from February. This figure
was (6.1)% below the March 2016 level.
State Agency Data
At the beginning of May 2017, the total AHCCCS
caseload was 1.88 million members. Since the federal
health care expansion in January 2014, the overall
AHCCCS population has grown by 617,900 members.
Total monthly enrollment increased by 6,400 members,
or 0.3%, during April. Traditional and Proposition 204
populations of low income parents and children
collectively grew 2,400 (0.2%) during the month. The
collective growth also included a recategorization of
members from Traditional to Proposition 204 to correct
prior month coding errors.
Laws 2016, Chapter 112 reopened enrollment in the
KidsCare program for children with family incomes
above those in the Traditional population, beginning
September 1, 2016. Following the enrollment freeze in
January 2010, the KidsCare caseload had dropped to
500 members by August 2016. Through May 1,

enrollment in the program reached 19,800, or 2,600
more than the prior month’s enrollment.
In January 2014, the state started accepting new
enrollment to the Proposition 204 childless adults
program. In April 2016, the childless adult population
increased by 200, or 0.1%. At 317,400, this population
is 3.2% higher than a year ago.
The state also opted to expand adult Medicaid
coverage to 133% of FPL. Their enrollment increased
by 100 in April and now totals 82,100 individuals.
Enrollment is (4.6)% lower than a year ago. The share
of this population's cost that is funded by the federal
government decreased from 100% to 95% in January.
There were 17,797 TANF recipients in the state in April,
representing a (0.0)% monthly caseload decrease
from March. The year-over-year number of TANF
recipients has declined by (10.9)%. The statutory
lifetime limit on cash assistance is 12 months.
The Supplemental Nutrition Assistance Program
(SNAP), formerly known as Food Stamps, provides
assistance to low-income households to purchase
food. In April, 912,171 people received food stamp
assistance in the state, representing a (1.4)% decrease
over the March caseload. Compared to April 2016,
the level of food stamp participation has declined by
(3.8)%.
The inmate population was 42,269 as of April 30,
2017. This is a (1.4)% decrease since last April. The
population decreased by (0.2)% since March 2017.
Based on information the Department of Child Safety
provided for March 2017, reports of child
maltreatment totaled 47,579 over the last 12 months,
a decrease of (5.2)% over the prior year. There were
17,127 children in out-of-home care as of February
2017, or (10.1)% less than in February
2016. Compared to the prior month, the number of
out-of-home children decreased by (0.3)%.

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017
Table 4

MONTHLY INDICATORS

Indicator
Arizona
Employment
- Regular Unemployment Rate
- Total Unemployment Rate (discouraged/underemployed)
- Initial Unemployment Insurance Claims
- Unemployment Insurance Recipients
- Non-Farm Employment - Total
Manufacturing
Construction
- Average Weekly Hours, Private Sector
- Average Hourly Earnings, Private Sector
Sales
- Retail Taxable Sales
Motor Vehicles/Misc. Auto
Furniture/Home Furnishings
Building Material/Lawn & Garden
Building
- Residential Building Permits (12-month avg)
Single-family
Multi-family
- Maricopa County/Other, Home Sales (ARMLS)
Single-Family (Pending Sales)
- Maricopa County/Other, Median Home Price (ARMLS)
Single-Family (Pending Sales)
- Phoenix S&P/C Home Price Index (2000 = 100)
- Maricopa Pending Foreclosures
- Greater Phoenix Total Housing Inventory, (ARMLS)
Tourism
- Phoenix Sky Harbor Air Passengers
- National Park Visitors
- State Park Visitors
- Revenue Per Available Hotel Room
General Measures
- Arizona Consumer Confidence Index (1985 = 100)
- Arizona Leading Index -- 6 month projected growth
- Arizona Personal Income
- Arizona Population
- State Debt Rating
Standards & Poor’s/Moody’s
Outlook
Agency Measures
- AHCCCS Recipients
Acute Care Traditional
Prop 204 Childless Adults
Other Prop 204
Adult Expansion
Kids Care I
Long-Term Care – Elderly & DD
Emergency Services
- Department of Child Safety (DCS)
Annual Reports of Child Maltreatment (12-month total)
DCS Out-of-Home Children
Filled Caseworkers (1406 Budgeted)
- ADC Inmate Growth
- Department of Economic Security
- TANF Recipients
- SNAP (Food Stamps) Recipients
- Judiciary Probation Caseload
Non-Maricopa
Maricopa County
United States
- Gross Domestic Product
(Chained 2009 dollars, SAAR)
- Consumer Confidence Index (1985 = 100)
- Leading Indicators Index (2010 = 100)
- Consumer Price Index, SA (1982-84 = 100)
- Personal Consumption Price Index (2009 = 100)

Change From
Prior Period

Change From
Prior Year

Time Period

Current Value

April
1st Q 2017
March
March
April
April
April
March
March

5.0%
10.9%
17,840
23,718
2,764,800
161,600
139,000
34.4
$24.69

0.0%
0.1%
18.7%
1.6%
0.4%
0.1%
1.7%
0.6%
(1.4)%

(0.4)%
(0.8)%
0.7%
(6.1)%
1.9%
1.4%
4.3%
0.3%
4.1%

February
February
February

$952.9 million
$331.7 million
$379.8 million

(12.6)%
(27.7)%
(1.9)%

5.8%
3.1%
11.4%

March
March

24,791
11,499

1.2%
7.0%

4.1%
26.8%

April

6,300

(5.0)%

(7.0)%

April
February
March
March

$257,095
165.38
3,086
24,612

4.6%
0.4%
(3.2)%
(0.6)%

9.4%
5.3%
(26.3)%
(11.1)%

March
December
February
March

4,281,381
646,020
256,236
$126.72

27.7%
(17.0)%
32.2%
21.5%

(0.4)%
7.5%
(5.6)%
8.1%

4th Q 2016
December
4th Q 2016
July 2016

91.7
3.6%
$284.3 billion
6,931,071

3.7%
(0.1)%
0.9%
N/A

12.9%
0.0%
4.6%
1.7%

May
May

AA / Aa2
Stable

N/A
N/A

N/A
N/A

May 1st

1,876,009
1,081,510
317,439
193,752
82,143
19,822
59,478
121,865

0.3%
(1.7)%
0.1%
12.5%
0.2%
14.8%
0.3%
0.8%

March
February
April
April

47,579
17,127
1,361
42,269

(0.1)%
(0.3)%
7
(0.2)%

April
April

17,797
912,171

0.0%
(1.4)%

February
February

19,078
28,049

1st Q, 2017 (1st
Estimate)
April
March
April
March

98
97

4.9%
4.0%
3.2%
6.3%
(4.6)%
N/A
2.6%
6.4%
(5.2)%
(10.1)%
67
(1.4)%
(10.9)%
(3.8)%
469
532

$16.8 trillion

1.9%

0.7%

120.3
126.7
244.2
112.0

(3.7)%
0.4%
0.2%
(0.2)%

27.0%
3.5%
2.2%
1.8%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

JCCR Meeting
At its April 27, 2017 meeting, the Joint Committee on
Capital Review considered the following issues:
Arizona Department of Administration – Review of
Funding Reallocation for 1740 West Adams
Renovation – The Committee gave a favorable
review of $1,059,000 to reinforce the concrete floor
slabs and structural columns inside the building.
ADOA will fund the additional costs using $791,000 in
cost savings from other FY 2017 Building Renewal
projects and $268,000 from its Contingency
Allocation.

Department of Juvenile Corrections – Review of FY
2017 Building Renewal Allocation Plan – The
Committee gave a favorable review of review of the
remaining $776,300 of the department's
appropriation for building renewal projects in FY 2017
for roof repair, floor covering systems, HVAC
replacement and shower door replacement at the
Adobe Mountain Juvenile Facility.
The Committee review prohibits DJC from using the
building renewal monies for any building occupied
by the Department of Corrections or in currently
vacant buildings, and includes standard
reallocation/emergency provisions.

Summary of Recent Agency Reports
Department of Child Safety – Monthly Report on Hiring –
Pursuant to a FY 2017 General Appropriation Act
footnote, the Department of Child Safety (DCS) reported
on its progress in hiring and retaining child safety staff
through April 2017. (See Table 5 below.)
The number of direct line child safety staff (caseworkers,
caseworkers in training, caseworkers awaiting training
and hotline staff) was 1,361 in April, or (45) fewer staff
than the number of funded positions. Most of the
difference between funded positions and filled positions
was driven by lower-than-budgeted staffing of
caseworkers, which was partly offset by higher-thanbudgeted staff in training. Total direct line staff
increased by 7 since March.
There were also 1,398 non-direct line child safety staff in
April 2017, or (113) fewer staff than the funded staffing
level. The budgeted staffing level is 1,511 excluding
Attorney General positions. Total non-direct line positions
decreased by (6) since March. (Patrick Moran)
Arizona Commerce Authority – Annual Report on the
Healthy Forest Enterprise Program – Pursuant to A.R.S. §
41-1516I, the Arizona Commerce Authority (ACA) is
required to report on the Healthy Forest Enterprise
Incentives Program by May 1 annually regarding the: 1)

quantity and measured weight of qualifying forest
products; 2) number of new full-time employees
hired in qualified employment positions; and 3)
number of full-time employees employed in
qualified employment positions. In calendar year
2016 the total weight of qualified harvest,
processed, or transported forest products was
718,201 tons and 1 of the 9 participating companies
reported the utilization of income tax credits. This
company reported no new full-time employees
hired in qualified positions for tax credit purposes in
2016 and 9 full-time employees in qualified positions
for tax credit purposes in 2016. ACA reports that the
9 full-time employees were hired in the years prior to
2016 and may receive a tax credit subject to the
Department of Revenue's approval. The maximum
possible aggregate credit cost for these 9 full-time
positions would be $27,000 across all years.
The Healthy Forest Enterprise Incentives Program
allows businesses primarily engaged in the
harvesting, initial processing, or transporting of forest
products in Arizona to qualify for the following: a use
and transaction privilege tax exemption on
qualified purchases, a 50% reduction in the use fuel
tax, a reduction in the assessment ratio of personal
and real property from 18.5% to 5%, an income tax

Table 5
DCS Filled FTE Positions as of April 2017
Caseworkers
Hotline Staff
Staff in Training
Subtotal - Direct Line
Subtotal - Non-Direct Line Staff
Grand Total 1/

____________
1/ Excludes 276.2 Attorney General Staff.

Funded
1,190
76
140
1,406
1,511
2,917

April
1,092
73
196
1,361
1,398
2,759

Difference
(98)
(3)
56
(45)
(113)
(158)

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Summary of Recent Agency Reports (Continued)
credit of up to $3,000 per employee on new jobs
created, and an income tax credit of up to $9,000 per
employee for the cost of training. (Eric Billings)
Department of Education – Budget Status Report –
Pursuant to a General Appropriation Act footnote and
A.R.S. § 35-131D, the Arizona Department of Education
(ADE) recently provided an update regarding its
budget status for FY 2017. In that report, ADE estimates
that it will experience a $(10.4) million net funding
shortfall for formula programs for FY 2017. This consists
of an estimated $(5.5) million shortfall for Basic State Aid
and estimated $(4.9) million shortfall for Additional State
Aid (the Homeowner’s Rebate and 1% Cap programs).
ADE’s current $(10.4) million shortfall estimate is subject
to revision as additional data become available. The
enacted FY 2018 budget includes a $17.1 million

supplemental to address ADE's FY 2017 shortfall.
(Steve Schimpp)
Department of Public Safety (DPS) – Report on
Disposition of DPS Helicopter – At its June 16, 2016
meeting, the Joint Legislative Budget Committee gave
a favorable review to DPS' expenditure plan for the
Border Strike Task Force (BSTF) One-Time line item.
Included in the favorable review was a provision that
DPS report back to the committee regarding the
amount of the proceeds received from the sale of one
of their existing helicopters and how the funds were
allocated. On May 11, 2017, DPS reported that the
existing helicopter was traded in for credit toward the
purchase of the new helicopter included in the
favorably reviewed BSTF One-Time line item
expenditure plan. (Eric Billings)

April Spending
April 2017 General Fund spending was $634.2 million,
which represents an increase of $62.4 million above
April 2016. (See Tables 6 & 7). Year-to-date, General
Fund spending is $8.22 billion, or $155.6 million above
the prior year.
As mentioned in the March Monthly Fiscal Highlights,
the General Accounting Office (GAO) had provided
JLBC Staff with spending information which included
$80 million of General Fund expenditures related to the
Public School Credit Enhancement Program
established by Laws 2016, Chapter 129 (FY 2017 Credit
Enhancement Budget Reconciliation Bill).

Under the legislation, the Treasurer would invest $80
million of the state's operating fund in "Program
Funding Obligations" issued by the Credit
Enhancement Eligibility Board which operates the
program. This $80 million, when combined with other
prior funding amounts, are deposited into the Arizona
Public School Credit Enhancement Fund to serve as
collateral for school debt issuances.
In subsequent discussions, GAO has indicated that
they do not intend to count this $80 million amount as
a General Fund expenditure and have removed it
from official state spending reports.

Table 6
General Fund Spending ($ in Millions)
Change From
April 17

YTD Change

April 16

Year-to-Date

from FY 16

Agency
AHCCCS

68.1

56.3

1,426.1

435.7

Corrections

79.6

(9.8)

859.9

(10.5)

Child Safety

25.5

(16.0)

306.4

(48.1)

Economic Security

0.4

(9.2)

496.6

57.3

291.8

10.7

3,571.3

137.3

Health Serv ices

6.5

(8.8)

71.4

(505.3)

Public Safety

25.4

(1.8)

105.2

18.7

School Facilities Board

0.2

(4.0)

213.7

23.4

Univ ersities

77.4

39.4

582.0

(4.1)

Leaseback Debt Serv ice

0.0

0.0

84.1

0.0

Other

59.3

5.6

507.5

51.2

Total

634.2

62.4

8,224.2

155.6

Education

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Table 7

General Fund Spending
($ in Thousands)
Agency
Dept. of Admin./Automation Projects Fund
ADOA – Sale/Leaseback Debt Service
Office of Administrative Hearings
Commission of African-American Affairs
Department of Agriculture
AHCCCS
Attorney General
State Board of Charter Schools
Department of Child Safety
AZ Commerce Authority
Community Colleges
Corporation Commission
Department of Corrections
County Funding
AZ State Schools for the Deaf & Blind
Office of Economic Opportunity
Department of Economic Security
State Board of Education
Department of Education
DEMA
DEQ – WQARF
Office of Equal Opportunity
State Board of Equalization
Board of Executive Clemency
Department of Financial Institutions
Department of Fire, Bldg and Life Safety
Department of Forestry and Fire Management
Department of Gaming
Arizona Geological Survey
Governor/OSPB
Department of Health Services
Arizona Historical Society
Prescott Historical Society of AZ
Department of Housing
Independent Redistricting Comm.
Department of Insurance
Judiciary
Supreme/Superior Court
Court of Appeals
Department of Juvenile Corrections

April 17
2,544.4
112.7
13.2
770.5
68,056.5
2,028.0
84.8

Change from
April 16

Year-to-Date

YTD Change
from FY 16

1,024.9
(2.2)
5.8
71.7
56,307.3
469.5
9.7

30,718.5
84,117.4
737.1
105.0
7,369.1
1,426,115.6
19,383.9
843.9

10,260.9
2.8
9.5
4.4
534.2
435,702.0
770.7
(61.1)

25,493.8
1,866.7
13,834.6
42.1
79,563.0
1,907.0
28.0
439.8
71.1
291,801.9
739.0
18.7
22.5
55.0
200.7
3,334.9
582.0
6,540.2
427.1
58.7
109.9
45.7
398.2

(16,043.0)
(341.6)
1,328.1
(26.2)
(9,764.2)
(248.3)
28.0
(9,243.5)
(30.5)
10,690.1
(2,378.3)
(11.9)
(15.2)
(4.3)
(25.6)
(228.7)
207.1
(74.7)
(52.3)
(8,832.1)
106.2
(9.9)
109.9
(109.9)
(114.7)

306,423.5
18,097.9
54,477.5
714.0
859,902.4
14,000.5
19,682.5
28.0
496,640.8
762.2
3,571,332.8
6,821.8
2,823.6
152.6
463.9
634.1
2,341.6
(2.4)
8,245.3
1,854.5
7,725.5
71,410.1
2,771.3
676.5
759.7
899.7
4,179.3

(48,098.2)
(4,210.1)
3,053.7
206.7
(10,529.5)
8,000.0
(1,597.0)
28.0
57,258.9
(246.2)
137,266.7
(2,424.4)
(4,176.4)
(11.7)
9.7
(137.8)
(115.3)
(1,854.2)
1,170.2
60.1
(813.4)
(590.8)
(505,251.3)
16.2
(92.4)
759.7
(637.4)
(92.7)

10,179.5
1,067.4
2,233.4

(485.2)
(116.4)
1,604.7

80,823.2
11,653.9
19,040.3

3,560.7
(106.5)
(1,443.4)

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2017

Table 7 (Continued)

Agency
State Land Department
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.
Legislative Council
Senate
Mine Inspector
Nav. Streams & Adjudication
Occupational Safety and Health Review
Arizona State Parks Board
Phoenix Convention Center
Comm. for Postsecondary Ed.
Department of Public Safety
Public Safety Personnel Retirement System
Radiation Regulatory Agency
Real Estate Department
Department of Revenue
School Facilities Board
Secretary of State
Tax Appeals Board
Office of Tourism
Department of Transportation
Governor's Office on Tribal Relations
Universities
Board of Regents
Arizona State University
Northern Arizona University
University of Arizona
Department of Veteran Services
Department of Water Resources
Water Infrastructure Finance Authority
Department of Weights & Measures
Other - State Treasurer/JP Salaries
Other - ADOT Capital (Navajo Nation Projects)
Other - ADOT Capital (Local HURF Distribution)
Other
Total

April 17

Change from
April 16

Year-to-Date

YTD Change
from FY 16

841.1

(300.8)

8,516.5

(664.7)

2,717.3
1,118.6
166.4
380.3
744.5
89.7
14.0
25,415.8
294.7
155.0
4,243.4
217.6
2,930.6
35.0
924.8
0.0
5.1

307.0
26.6
4.0
(63.6)
120.7
(0.4)
1.3
(140.0)
(1,825.4)
(109.7)
(0.6)
2,661.4
(4,029.5)
2,252.9
8.2
220.4
0.0
(4.4)

16,529.7
11,321.3
1,923.0
5,591.0
7,552.1
954.4
109.4
20,449.0
1,392.0
105,165.1
6,000.0
1,522.7
2,074.9
26,381.1
213,667.4
23,650.2
230.9
7,112.0
38.0
39.7

(487.5)
(489.0)
1.2
319.2
942.9
1.8
7.6
(2.5)
(417.8)
(4.8)
18,722.1
(72.0)
17.1
(1,447.8)
23,408.2
12,366.5
6.0
8.3
30.9
(1.1)

20,854.4
25,379.8
8,439.7
22,772.0
489.0
1,037.8
214.3
634,151.9

19,476.4
8,787.0
2,487.8
8,691.8
106.7
81.7
(226.3)
46.7
18.3
62,403.0

35,632.1
247,465.6
84,347.6
214,575.9
4,864.8
8,923.2
500.0
0.8
976.2
1,500.0
30,000.0
469.6
8,224,203.4

15,078.8
(9,330.7)
(4,666.2)
(5,156.5)
314.8
(214.1)
500.0
(1,057.2)
(105.8)
1,500.0
30,000.0
332.8
155,625.8

JLBC
Jul-15

Jul-16

Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17

Jan-17

Jan 08

$24.69 / Hour
(March 2017)

$20

$19

4.1% Y/Y Growth
(March 2017)
Total Monthly Claims for UI Benefits

Jan-17

Jul-16

Jan-16

Jul-15

Jan-15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

$21

Jan-16

Jan 07
July 07

$ / Hour
$22

Jan-15

12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

Year Over Year Growth (%)

Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17

Page:
Thousands of Jobs

May 2017
Appendix A

1

JLBC

Average Hourly Earnings – Private Sector

$26

3

JLBC

Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17

2……Total Non-Farm Employment
3……Average Hourly Earnings – Private Sector
4……Initial Claims for Unemployment Insurance
5……State Sales Tax Collections – Retail Category
6……State Sales Tax Collections – Contracting
Category
7……Residential Building Permits
Year Over Year Growth (%)

Arizona Economic Trends

Total Non-Farm Employment

2,900

2,800

2,700

2,600

2,500

2,400

2,300

2,200

$22.73 / Hour
(Octoberjobs
2014)
2,764,800
(April 2017)

2,100

8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%

1.9% Y/Y Growth
(April 2017)

2

$25

Initial Claims for Unemployment Insurance

$24

$23

45,000

40,000

35,000

30,000

17,840 Claims
(March 2017)

25,000

20,000

15,000

10,000

5,000

Not seasonally adjusted

4

Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17

Building Permits

JLBC
Excludes temporary 1 ¢ sales tax

60,000

50,000

12-Month Moving Sum
Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jul 14

* January 2014 estimate adjusted downward by $30 million to reflect onetime category shift.

(1.3)% Y/Y Growth
(March 2017)

5

Residential Building Permits

100,000

90,000

80,000

70,000

Single Family Unit - 24,791 Permits
Multi-Family Unit - 11,499 Permits
(Mar. 2017)

40,000

30,000

20,000

10,000

0

7

JLBC
Jan 08

Excludes temporary 1 ¢ sales tax

Jul 15

Jan 17

Jul 16

Jan 16

Jan 08

Jan 17

Jul 16

Jan 16

Jul 15

Jan 15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

$50

Jan 15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
Jan 07

$100

July 07

$184.7 million
(March 2017)
July 06

$ in Millions

$175

July 07

Jul 16
Jan 17

$200

Jan 07

Jul 15
Jan 16

$ in Millions
$225

July 06

Year Over Year Growth (%)

Jan 17

Jul 16

Jan 16

Jul 14
Jan 15

$125

Jul 15

Jan 15

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

July 06

* Jan 14

20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
* Jan 14

JLBC
Jan 07

July 06

Year Over Year Growth (%)

State Sales Tax Collections – Retail Category
State Sales Tax Collections – Contracting Category

$250
$100

$75

$33.5 million
(March 2017)

$150
$25

$0

3.0% Y/Y Growth
(March 2017)

6